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Question
From the following Trial Balance of Shradha Enterprises, you are required to prepare Final Accounts for the year ending on 31st March 2019.
Trial Balance as of 31st March 2019
| Debit balances | Amount (₹) | Credit Balances | Amount (₹) |
| Opening Stock | 2,40,000 | Capital | 13,00,000 |
| Purchases | 8,50,000 | Sundry Creditors | 1,20,000 |
| Returns Inward | 15,000 | Bills Payable | 60,000 |
| Wages | 29,000 | Sales | 25,00,000 |
| Power and Fuel | 21,800 | Return Outward | 8,000 |
| Travelling Expenses | 14,700 | Discount | 2,000 |
| Audit fees | 7,000 | Bank Overdraft | 1,54,000 |
| Royalty | 72,000 | Reserve for Bad and doubtful debts | 8,000 |
| Discount | 1,750 | ||
| Postage | 13,500 | ||
| Bad debts | 3,000 | ||
| Sundry Debtors | 5,20,000 | ||
| Furniture | 1,20,000 | ||
| Plant & Machinery | 15,00,000 | ||
| Freehold Premises | 7,02,000 | ||
| Rent, Rates and Insurance | 42,250 | ||
| 41,52,000 | 41,52,000 |
Adjustments:
1. Insurance is prepaid to the extent of ₹ 2,250
2. Closing stock is valued at ₹ 3,80,000 Cost price and ₹ 4,00,000 as Market price.
3. Outstanding Expenses are Wages ₹ 6,000 and Rent ₹ 5,000
4. Write off further had debts ₹ 1,500 and provide 5% Reserve for doubtful debts.
5. Depreciation on Furniture and Plant and Machinery at 10% p.a. and on Freehold Premises at 15% p.a.
Solution
| In the books of Shradha Enterprises | |||||
| Dr. | Trading and Profit and Loss A/c for the year ended 31st March, 2019 | Cr. | |||
| Particulars | Amt. (₹) | Amt. (₹) | Particular | Amt. (₹) | Amt. (₹) |
| To Opening Stock | 2,40,000 | By Sales | 25,00,000 | ||
| To Purchases | 8,50,000 | Less: Return Inwards | 15,000 | 24,85,000 | |
| Less: Return Outward | 8,000 | 8,42,000 | By Closing Stock | 3,80,000 | |
| To Wages | 29,000 | ||||
| Add: Outstanding | 6,000 | 35,000 | |||
| To Power and Fuel | 21,800 | ||||
| To Royalty | 72,000 | ||||
| To Gross Profit c/d | 16,54,200 | ||||
| 28,65,000 | 28,65,000 | ||||
| To Travelling Expenses | 14,700 | By Gross Profit b/d | 16,54,200 | ||
| To Audit Fees | 7,000 | By Discount | 2,000 | ||
| To Discount | 1,750 | ||||
| To Postage | 13,500 | ||||
| To Bad debts (T) | 3,000 | ||||
| Add: New B.D.(A) | 1,500 | ||||
| Add: New R.D.D.(A) | 25,925 | ||||
| 30,425 | |||||
| Less: Old R.D.D.(T) | 8,000 | 22,425 | |||
| To Rent, Rates and Insurance | 42,250 | ||||
| Less: Prepaid Insurance | 2,250 | ||||
| 40,000 | |||||
| Add: Outstanding Rent | 5,000 | 45,000 | |||
| To Depreciation on: | |||||
| Furniture | 12,000 | ||||
| Plant & Machinery | 1,50,000 | ||||
| Freehold Premises | 1,05,300 | 2,67,300 | |||
| To Net Profit c/d | 12,84,525 | ||||
| 16,56,200 | 16,56,200 | ||||
| Balance Sheet as of 31st March 2019 | |||||
| Liabilities | Amt. (₹) | Amt. (₹) | Assets | Amt. (2) | Amt. (₹) |
| Capital | 13,00,000 | Sundry Debtors (T) | 5,20,000 | ||
| Add: Net Profit | 12,84,525 | 25,84,525 | Less: New B.D.(A) | 1,500 | |
| Sundry Creditors | 1,20,000 | 5,18,500 | |||
| Bills Payable | 60,000 | Less: New R.D.D.(A) @ 5% | 25,925 | 4,92,575 | |
| Bank Overdraft | 1,54,000 | Furniture | 1,20,000 | ||
| Outstanding Wages | 6,000 | Less: Depreciation @ 10% | 12,000 | 1,08,000 | |
| Outstanding Rent | 5,000 | Plant & Machinery | 15,00,000 | ||
| Less: Depreciation @ 10% | 1,50,000 | 13,50,000 | |||
| Freehold Premises | 7,02,000 | ||||
| Less: Depreciation @ 15% | 1,05,300 | 5,96,700 | |||
| Prepaid Insurance | 2,250 | ||||
| Closing Stock | 3,80,000 | ||||
| 29,29,525 | 29,29,525 | ||||
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From the following Trial Balance of Sanjiv & Sons. Prepare Trading Account and Profit & Loss Account for the year ending on 31st March 2019 and a Balance Sheet as on that date.
| Particulars | Debit Amount (₹) | Credit Amount (₹) |
| Opening stock | 22,000 | |
| Purchases & Sales | 1,78,000 | 4,60,000 |
| Carriage Outward | 4,800 | |
| Plant and Machinery | 50,000 | |
| Debtors and Creditors | 44,000 | 76,000 |
| Returns | 2,000 | 4,000 |
| Buildings | 58,000 | |
| Motor Van | 40,000 | |
| Printing & Stationery | 3,000 | |
| Wages | 28,000 | |
| Reserved for Bad debts | 3,200 | |
| Commission | 2,400 | |
| Office expenses | 5,400 | |
| Carriage | 9,000 | |
| Furniture | 20,000 | |
| Premises | 81.000 | |
| Loose Tools | 20,400 | |
| Drawings | 24,700 | |
| Bank Overdraft | 22,000 | |
| Cash in hand | 71,000 | |
| Dividend | 3,300 | |
| Capital | 1,40,000 | |
| Salaries | 44,000 | |
| Bills Receivable & Bills Payable | 5,600 | 8,400 |
| Bad debts | 2,400 | |
| Advertisement (for 3 year) | 6,000 | |
| 7,19,300 | 7,19,300 |
Additional information:
- Closing stock on 31st March, 2019, was at cost ₹ 60,000 and Market Price ₹ 70,000.
- Outstanding expenses: Wages ₹ 4,000, Salary ₹ 2,400
- Provide depreciation at 10% on Motor Van and 5% on Furniture.
- Write off ₹ 2,000 for bad debts and create R.D.D. at 5% on debtors.
- Provide 10% p.a. interest on capital.
From the following Trial Balance of Nandini & Co. as of 31st March 2019. Prepare Final Accounts after considering the adjustments given below.
| Particulars | Debit Amount (₹) | Credit Amount (₹) |
| Loose Tools | 1,10,000 | |
| Furniture & Fixtures | 81,000 | |
| Bad debts | 1,400 | |
| Sundry Debtors | 81,600 | |
| Stock (31st March 2018) | 52,000 | |
| Purchases | 77,000 | |
| Sales Cash | 21,000 | |
| Sales Credit | 81,000 | |
| Returns | 400 | 600 |
| Advertisements | 4,800 | |
| Rate taxes & Insurances | 6,000 | |
| Repairs & maintenance | 1,200 | |
| Salaries (2/3rd for factory) | 18,000 | |
| Rent (Paid for 11 months) | 2,200 | |
| Machinery (Includes ₹ 24,000 | 84,000 | |
| purchased on 1st Oct. 2018) | ||
| Capital | 3,60,000 | |
| R.D.D. | 8,000 | |
| Sundry Creditors | 70,000 | |
| Drawings | 14,000 | |
| Interest | 1,200 | |
| Dividend | 2,800 | |
| Bank Balance | 40,000 | |
| Royalty | 6,000 | |
| 9% Bank loan (30th Sept 2018) | 40,000 | |
| Carriage Outwards | 4,000 | |
| Discount | 1,000 | |
| 5,84,600 | 5,84,600 |
Adjustments:
1. Closing stock valued at ₹ 1,00,000.
2. Write off ₹ 2,000 as bad debts and create a provision for doubtful debts @ 5% on Sundry Debtor.
3. Depreciate Machinery by 10% p.a. and Loose Tools is valued at ₹ 1,00,000.
4. Charge Interest on Capital @ 2% p.a.
Following are the closing ledger balances of Deepak & Co. Prepare Trading Account and Profit & Loss Account for the year ended 31st March 2019 and Balance sheet as of that date.
Ledger Balances of Mr. Deepak and Co. as of 31st March, 2019
| Particulars | Amount (₹) | Particulars | Amount (₹) |
| Bank | 30,000 | Capital | 1,20,000 |
| Bills Payable | 7,500 | Insurance Premium | 18,000 |
| Furniture | 19,500 | (1.1.2019 to 31.12.2019) | |
| Commission Received | 3,000 | Salaries | 30,000 |
| Stock (1.4.2018) | 27,000 | Bank loan | 30,000 |
| Building | 37,500 | Sundry expenses | 7,500 |
| Wages | 7,500 | Interest paid | 1,500 |
| Creditors | 37,500 | Machinery | 25,500 |
| Bad Debts | 4,500 | Sales | 96,000 |
| R.D.D. (old) | 3,000 | Purchases | 42,000 |
| Sales Returns | 1,500 | Debtors | 31,500 |
| Purchases returns | 3,000 | ||
| Cash in hand | 16,500 |
Adjustments:
1. Closing stock was valued at ₹ 60,000
2. An amount of ₹ 3,000 is still to be received on account of commission.
3. Provision for discount on debtors and Provision for discount on Creditors are to be created 2% and 3% respectively.
4. Amount of Furniture is to reduce by ₹ 4,500 and Building by 10%.
5. Outstanding expenses Salaries ₹ 4,500 and Wages ₹ 1,500.
From the following Trial Balance of Ayub & Co. as of 31st March 2019, you are required to prepare Trading Account, Profit and Loss Account for the year ending 31st March 2019, and Balance Sheet as of that date after making necessary adjustments.
Trial Balance as of 31st March 2019
| Debit balances | Amount (₹) | Credit Balances | Amount (₹) |
| Cash in hand | 4,575 | Discount | 900 |
| Cash at Bank | 15,450 | Loan from Abhay | 15,000 |
| Drawings | 18,000 | Creditors | 18,225 |
| Furniture | 6,000 | Sales | 1,95,000 |
| Plant & Machinery | 45,000 | Returns Outward | 3,000 |
| Opening Stock | 30,000 | Capital | 90,000 |
| Purchases | 1,20,000 | ||
| Salaries and Wages | 33,600 | ||
| Debtors | 30,600 | ||
| Returns Inward | 7,500 | ||
| Audit Fees | 2,250 | ||
| Rent. Rates and Taxes | 5,400 | ||
| Bad debts | 600 | ||
| Travelling Expenses | 750 | ||
| Insurance | 1,200 | ||
| Interest on Loan from Abhay | 450 | ||
| Trade Expenses | 300 | ||
| Sundry expenses | 450 | ||
| 3,22,125 | 3,22,125 |
Adjustments:
1. Stock on hand on 31st March 2019 valued at ₹ 60,000
2. Rent amounting to ₹ 600 Prepaid.
3. Bad Debts ₹ 600 and create a Provision for Doubtful Debts 5%
4. Depreciation on Plant & Machinery by 10% and Furniture is valued at ₹ 4,500
5. Outstanding Salaries ₹ 900
From the following Trial Balance of John & Sons, you are required to prepare Trading Account, Profit and Loss Account for the year ending 31st March 2019 and Balance Sheet as of that date.
Trial Balance as of 31st March 2019
| Debit balances | Amount (₹) | Credit Balances | Amount (₹) |
| Drawings (1st July 2018) | 12,000 | Sundry Creditors | 40,000 |
| Cash in hand | 8,000 | Returns | 4,500 |
| Cash at Bank | 20,000 | Dividend | 100 |
| Bills Receivable | 15,000 | Rent | 200 |
| Wages | 1,800 | Sales | 53,200 |
| Discount | 700 | Bank Loan | 5,000 |
| Rent | 2,000 | Capital | 99,700 |
| Advertisement | 3,000 | ||
| Bad debts | 1,200 | ||
| Travelling Expenses | 800 | ||
| Purchases | 40,000 | ||
| Machinery | 15,000 | ||
| Motor Car | 18,000 | ||
| Returns | 1,200 | ||
| Stock (1st April 2018) | 10,000 | ||
| Sundry Debtors | 35,000 | ||
| Carriage outwards | 1,000 | ||
| 6% Investment | 18,000 | ||
| (1st Sept 2018) | |||
| 2,02,700 | 2,02,700 |
Adjustments:
1. Closing Stock ₹ 27,000
2. Charge Depreciation on Machinery and Motor car @ 10% and 5% respectively.
3. Create R.D.D. 5% on Sundry Debtors
4. Interest on Drawings @ 5% p.a.
5. Create Discount on Sundry Creditors 3%
6. Advertisement ₹ 1,000 is prepaid.
7. Outstanding Rent ₹ 1,500
From the following Trial Balance of Pushkraj, you are required to prepare Trading Account and Profit and Loss Account for the year ended 31st March 2019 and Balance Sheet as of that date.
Trial Balance as of 31st March 2019
| Debit balances | Amount (₹) | Credit Balances | Amount (₹) |
| Drawings | 2,000 | Capital | 80,000 |
| Motor Car | 30,000 | Sundry Creditors | 25,000 |
| Cash in hand | 1,000 | Dividend | 4,800 |
| Bills Receivable | 20,000 | Commission | 2,535 |
| Wages | 1,000 | 8% Loan (taken on | 13,700 |
| Discount | 235 | 1.7.2018) | |
| Rent | 300 | Purchases Returns | 400 |
| Advertisement | 2,500 | Sales | 38,680 |
| Bad Debts | 500 | ||
| Travelling expenses | 1,000 | ||
| Purchases | 27,400 | ||
| Machinery | 30,000 | ||
| Office expenses | 500 | ||
| Sales Returns | 680 | ||
| Opening Stock | 10,000 | ||
| Sundry Debtors | 35,500 | ||
| Carriage Outward | 500 | ||
| Cash at Bank | 2,000 | ||
| 1,65,115 | 1,65,115 |
Adjustments:
1. Stock on 31st March 2019 was valued at ₹ 28,000
2. Create a Provision for doubtful debts on Sundry Debtors @ 5%
3. Depreciate Motor car by 5% p.a. and Machinery by 7% p.a.
4. Outstanding expenses Rent ₹ 800 & Wages ₹ 1,000
5. Charge interest on Capital @ 3% p.a.
6. Goods of ₹ 4,000 withdrawn by the proprietor for personal use.
From the following Trial Balance of Manish Enterprise, Prepare the Trading Account and Profit and Loss Account for the year ended 31st March 2019 and Balance sheet as of that date.
Trial Balance as of 31st March 2019
| Debit balances | Amount (₹) | Credit Balances | Amount (₹) |
| Cash in hand | 5,200 | Capital | 50,000 |
| Opening stock | 10,370 | Bank Loan | 15,000 |
| Goodwill | 10,000 | Bills Payable | 8,500 |
| Patents | 4,000 | Creditors | 38,260 |
| Cash at Bank | 4,400 | General Reserve | 1,500 |
| Freight | 2,500 | Dividend | 2,000 |
| Power & Fuel | 1,500 | Interest on Fixed Deposit | 3,440 |
| Furniture | 12,000 | Sales | 40,000 |
| Purchases | 35,260 | ||
| Mobile charges | 3,200 | ||
| Factory Salaries | 2,400 | ||
| Repairs | 800 | ||
| Lighting | 1,000 | ||
| Carriage outward | 360 | ||
| Professional charges | 1,240 | ||
| Debtors | 40,000 | ||
| Plant & Machinery | 13,700 | ||
| Office Equipments | 10,000 | ||
| Carriage Inwards | 770 | ||
| 1,58,700 | 1,58,700 |
Adjustments:
1. Closing Stock was ₹ 32,000.
2. Write off 50% of patents, depreciate Plant & Machinery by 10% p.a and Office Equipment by 20%.
3. Reserve for bad debts is to be created 5% and discount on Debtors 2%.
4. Outstanding expenses Mobile charges ₹ 300 and Freight ₹ 500
5. Charge Interest on Capital @ 5%.
6. Goods of ₹ 2,000 distributed on free samples.
